1. Brian provides his client with research about company MPL’s stock on May 13, 2012. Brian’s
wife Lara inherited the company’s stock a week prior to the research submission. Which of the
following actions by Brian would least likely result in a violation of the CFA Institute Code of
Ethics and Standards of Professional Conduct?
A. Failure to disclose this potential conflict to his employer.
B. Failure to disclose this potential conflict in any reports or recommendations he authors.
C. Failure to disclose this potential conflict to Lara.

 

2. In order to meet a crucial deadline, Anthony tells his secretary to contact an external advisor for
international hedge funds. The basis for selection of the advisor should be minimum amount of
fees charged. Which of the following Standards of Professional Conduct has Anthony most
likely violated?
A. Diligence and Reasonable Basis
B. Referral Fees
C. Suitability

 

3. Antonio Gonzales, CFA, is a research analyst at Acme Investments and recently published a buy
recommendation for Jolly Foods Company stock directed towards high risk tolerant clients. His
recommendation was based on thorough study and analysis of the company’s financials,
competitive landscape, operational performance and managerial competence. Gonzales in his
recommendation did not disclose that he still held stock of Jolly Foods which was part of his
compensation plan when he had worked for the company three years ago. A fortnight later, Jolly
Foods announced its annual earnings to be less than last year by 15% and the share price fell by
nearly 30% as a result. Gonzales is most likely in violation of the CFA Institute Standards of
Professional Conduct due to which of the following?
A. Research
B. Recommendation
C. Ownership of company stock

 

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